Equity Bank (Kenya) has updated interest rates on new and existing variable-rate loans following the Central Bank of Kenya’s reduction of the Central Bank Rate (CBR) to 9%, signaling lower borrowing costs for customers and aligning facilities with regulatory guidelines.
Equity Bank (Kenya) Limited has announced adjustments to its local currency variable-rate loan products following the Monetary Policy Committee’s decision to revise the Central Bank Rate (CBR) from 9.25% to 9% on 9th December 2025. The changes will affect both newly issued loans and the gradual transition of existing loans to the CBR framework.
For all new local currency variable-rate loans, effective 10th December 2025, interest rates will now be calculated based on the revised 9% CBR, plus the applicable customer premium (K). This adjustment also applies retroactively to facilities issued after 1st December 2025, ensuring borrowers benefit immediately from the rate reduction.
“We are committed to complying fully with Central Bank of Kenya guidelines and ensuring a seamless transition for all our customers,” said an Equity Bank spokesperson.
For existing variable-rate loans currently linked to the Equity Bank Reference Rate (EBRR), the transition to CBR-based pricing will be completed by 28th February 2026. Borrowers affected by the change will receive a 30-day notice along with variation letters where necessary, explaining the adjustment from the EBRR to the CBR plus the customer-specific premium.
The move aligns with broader monetary policy objectives aimed at stimulating economic activity by reducing borrowing costs. By lowering lending rates, banks encourage credit uptake for businesses and households, which can support investment, consumption, and overall economic growth.
Equity Bank emphasized its commitment to assisting customers throughout the transition period. Borrowers seeking clarification can contact their Relationship Manager, visit the nearest Equity Bank branch, or reach out via the bank’s contact centre at +254 763 000 000.
“Customers can expect smooth implementation, transparent communication, and continued support as we align our lending products with the updated Central Bank Rate,” the spokesperson added.
This rate adjustment comes as part of Kenya’s broader monetary policy strategy to manage inflation and stimulate economic growth. Financial analysts expect that the reduction in the CBR may lead to lower borrowing costs across the banking sector, benefiting both consumers and small-to-medium enterprises.
The transition of existing loans to CBR-based pricing underscores the country’s ongoing efforts to standardize loan reference rates and enhance transparency in interest rate determination. By moving away from bank-specific reference rates such as the EBRR, borrowers gain clearer visibility on how changes in central bank policy impact their loan obligations.
Equity Bank’s proactive approach positions it as a lender responsive to regulatory updates and customer needs. The move is expected to encourage borrowing for productive purposes while supporting the government’s economic growth agenda.
